Local comments may influence oversight on electric industry

Thursday

Apr 30, 2009 at 12:01 AM

By JANE LOPES

By JANE LOPES

Editor

MIDDLEBORO— Electric customers in New England may actually be influencing events in Washington in such a way that "fair rates" can become a reality, according to Middleboro Gas and Electric Department officials.

Since the G&E's general manager and commission chairman attended an annual conference of municipal utility officials in the nation's capital in February, G&E public communications manager Sandy Richter said the federal government has taken positive steps in the direction of heeding the utility representatives' pleas for more oversight of the company that distributes electric power throughout the Northeast.

G&E Manager John Granahan and Commission Chairman Donald Triner, like many of their counterparts, went to Washington armed with hundreds of letters and notes from electric customers back home who talked about having to pay higher utility bills as a result of the actions of ISO New England at a time when people are having trouble making ends meet in a challenging economy.

—¦ this monthly bill is the highest in my 62 years as a utility customer," wrote one Middleboro man who filled out a comment form in the department's monthly newsletter. "low income - need help. Retired - money running out. Age 76 years old," another customer put it succinctly.

"We deregulated the airlines and created a mess," wrote another customer. "The same thing has happened with electricity. When will we learn?"

Deregulation of the electric industry in 1997 was supposed to reduce electricity costs, encourage utilities to invest in their facilities and ensure fair rates. But New England has so far experienced "none of the above," according to those attending the annual convention jointly held by the New England Public Power Association and the American Public Power Association in Washington two months ago. The municipal utility managers sought meetings with their legislative delegations and utility regulators to present the grievances of their customers and make clear their dissatisfaction with ISO New England, seen as the major culprit in the saga of deregulation in New England.

Since deregulation, western Massachusetts based ISO New England has been responsible for distributing electricity to all utilities in the region. The company charges fees for its services that are basically arbitrary in nature, according to its critics. Last year, municipal utilities filed a complaint regarding the fees, including more than $300 million assessed to the utilities in recent years due to a decision by ISO New England to maintain a power plant in Sandwich that would otherwise have been mothballed due to its age and outdated technology rather than invest in upgrading transmission lines.

As a result of the complaint from municipal utilities, the company is planning to invest in the upgrades and the fees have been dramatically reduced. But in the meantime the G&E had to increase its rates last June by an amount that cost the average customer about $15 a month.

While much of the G&E's purchased power costs remain fairly stable because of long-term contracts, the fluctuation in total costs, which range between $25 and $30 million annually, are largely the result of ISO New England fees.

The Middleboro representatives believe that it was the cards and letters they carried from the legislators' constituents in February that gained them direct access to Congressmen Barney Frank, Edward Markey and others during their visit to Washington.

"Normally you meet with their aides," commission Chairman Triner said.

Mr. Granahan, the G&E manager, and Mr. Triner told the lawmakers one issue is that the Federal Energy Regulatory Commission (FERC), which oversees the electric industry and companies like ISO New England to the extent that they are subject to federal oversight, has been made up of people from "west of the Mississippi" since the early '80s."

"Our fuel sources and our issues are completely different (in the East)," Mr. Granahan said. "Markey did agree that we need people from the East on the board and he said he wanted to see that happen."

Mr. Triner said municipal utilities are also looking for the ability to invest themselves in transmission upgrade projects but have been denied by private utilities despite the fact that the municipals can provide funding for the projects at much lower rates because the municipals are tax-exempt.

"We want our customers to reap some of the benefits of deregulation," Mr. Triner said. "That's the only way to bring rates down, and there are other states doing this."

Mr. Granahan said Congressman Frank agreed to write a letter of support to FERC and encourage his fellow lawmakers to do so.

Since the meeting in February, Sandy Richter, the public communications manager, said at least two positive moves have occurred. President Obama named Jon Wellinghoff, who is "known as an advocate for consumers," Ms. Richter said, as acting FERC chairman.

Also, last month ISO New England has agreed under pressure to stop a practice of awarding bids for providing electric power during peak usage periods to companies that were not in a position to provide the power if it was needed. The price paid to these "peak producers" set the price for the day, Ms. Richter said There was no penalty involved with this practice, which cost electric customers about $86 million over a four-year period, Ms. Richter said.